Shaw 4e PPT Ch03

CHAPTER 3
The nature of
capitalism
资本主义的本质
LEARNING OBJECTIVES
• Define capitalism and identify four key features of a
capitalist economic system. 定义资本主义并四个特征。
• Understand the moral justifications for capitalism as an
acceptable system. 理解资本主义作为一种可接受的制度的道德理由。
• Understand some of the different perspectives on
economic distribution as part of considering the moral
implications of an economic system. 理解经济分配的一些不同观点
LEARNING OBJECTIVES
• Understand some of the theoretical and operational
criticisms of capitalism.
• Understand the key features and criticisms of socialism
as an economic system.
• Understand some of the key contemporary
socioeconomic challenges facing Western capitalist
society.
CAPITALISM
• Capitalism is an economic system in which the
major portion of production and distribution is in
private hands, operating under what is termed a
profit or market system.
• In Australia, most production and most
companies are privately owned.
HISTORICAL BACKGROUND
• Capitalism developed during the fifteenth and
sixteenth centuries in Renaissance Europe.
• Prior to that business exchanges were typically
mediated via the guild system.
• Mercantile capitalism was based on mutual
dependence between state and commercial
interests.
HISTORICAL BACKGROUND
• Financial capitalism
– Pools, trusts, holding companies and an
interpenetration of banking, insurance and industrial
interests
• Global capitalism
– Currencies, stock exchanges and economic fortunes
of all capitalist countries are bound together in a
single financial system
KEY FEATURES OF CAPITALISM
资本主义的主要特征（亚当斯密国富论）
• Companies 公司
– Have the legal stature of individual persons, and are
able to enjoy many of the rights and entitlements that
a person has.
• Profit motive 利润动机
– Based upon a critical assumption that human beings
are basically economic creatures, who recognise and
are motivated by their own economic self-interest.
KEY FEATURES OF CAPITALISM
资本主义的主要特征
• Competition 竞争
– Prevents prices from escalating, because people
have the ability to choose from different suppliers.
• Private property 私有财产
– Capitalism requires private ownership of the major
means of production and distribution.
MORAL JUSTIFICATIONS OF CAPITALISM
资本主义的道德正当性
• Arguments for: 支持
– There is a natural right to property.
– Adam Smith’s ‘invisible hand’ – the greatest good for all.
• Arguments against: 反对
– There are moral limits on how much wealth a person
can amass.
– Wealth creates wealth without the need for labour.
MORAL JUSTIFICATIONS OF CAPITALISM
• The theory of capitalism rests on a view of
human beings as rational economic creatures,
who are naturally competitive and primarily
motivated by self-interest.
• This view presents little in the way of an ideal to
which either individuals or societies may aspire.
• 资本主义理论基于这样一种观点，即人类是理性的经济动物，他们具有天然的竞争力，主要受自身利益的驱使。
• 这种观点对个人或社会可能追求的理想几乎没有提出。
Mike Luckovich Editorial Cartoon is used with the permission of
JUST ECONOMIC DISTRIBUTION
Mike Luckovich and Creators Syndicate. All rights reserved.

• How the socioeconomic benefits and burdens
should be distributed is part of the consideration
of the moral implications of the system.
• No single principle seems to work in enough
circumstances to be defended successfully as
the sole principle of just economic distribution.
经济分配
• Alternative bases for distribution are to each:
– an equal share 平分
– according to individual need 个人需要
– according to personal effort 个人努力
– according to social contribution 社会贡献
– according to merit. 功绩
ETHICAL THEORY AND
ECONOMIC DISTRIBUTION
• Social well-being is the underlying principle of
utilitarianism.
• Worker participation promotes the interests of the
workers in decisions and wealth distribution.
• Greater equality of income reduces income disparity and
promotes equality and the greatest happiness of the
greatest number.
THE LIBERTARIAN APPROACH
• Justice as an ideal of liberty:
– Individuals have rights to freedom from interference.
– Justice is permitting each person to live as he or she wants.
• The right to own property is a fundamental right and
each individual has a right to the products of his or her
labour.
• Fraud is forbidden.
NOZICK’S THEORY OF JUSTICE
诺齐克的正义理论
1. A person who acquires a holding in accordance with the
principle of justice in acquisition is entitled to that
holding.
2. A person who acquires a holding in accordance with the
principle of justice in transfer is entitled to that holding.
3. No one is entitled to a holding except by (repeated)
applications of 1 and 2 above.
LIBERTY, MARKETS AND PROPERTY
• An unrestricted market based on liberty is
prioritised over other values.
• Libertarians – property rights grow out of a
person’s basic moral rights.
• Non-libertarians – property rights are a function
of the particular institutions of a given society.
RAWLS AND JUST
ECONOMIC DISTRIBUTION
罗尔斯与公正的经济分配
• Justice must be looked at in terms of fairness
and the moral equality of people. It is
characterised by the hypothetical contract and
two principles of justice.
HYPOTHETICAL CONTRACT
• What people would choose as the fundamental
principles to govern society if, hypothetically, we
were to meet for this purpose in the original position.
• Operating under a ‘veil of ignorance’, individuals will
likely adopt egalitarian principles (of justice) in order
to ensure that they are at least no worse off than
anyone else.
TWO PRINCIPLES OF JUSTICE
• Each person has equal rights to enjoy a
common system of liberties.
• Any inequalities may only occur if they are
attached to positions of power (open to all).
Such positions provide the greatest benefit to
the least privileged.
BENEFITS AND BURDENS
• There will be natural differences among humans:
– There is nothing natural or inevitable about the weight
attached by society to those differences.
– We cannot claim moral credit for our special talents.
– We cannot claim moral credit for our virtuous character.
CRITICISMS OF CAPITALISM
• Rational choice – a high level of consumer literacy is
required.
• Inequality – a tiny minority owns the majority of wealth.
• Concept of free marketplace challenged – corporate
welfare system protects many businesses from true
marketplace competition.
• Capitalism breeds oligopolies.
CAPITALISM BREEDS OLIGOPOLIES
• Small firms suffer owing to high costs,
complexity and the intense competitive
advantages of large-scale production.
• This means that large firms can:
– conspire to set prices
– eliminate competition
– monopolise industries.
FURTHER CRITICISMS OF CAPITALISM
• Corporate welfare programs protect business.
• Many businesses look to government to assist
them by means of:
– import restrictions
– training subsidies
– research and development subsidies.
• Competition is not in itself a good thing:
– There is frequently a negative correlation between performance
and individual competitiveness.
– It is often cooperation that best enhances achievement.
• Exploitation and alienation:
– Employers are able to exploit workers by paying them less than
the true value created by their labour.
– Legal, political and economic changes have moderated
employers’ ability to exploit their workers.
• Capitalism reinforces human tendencies towards
acquisitiveness, individualism and materialism.
• Capitalism requires humans to consume, but the
subsequent rise in standard of living does not
deliver the promised benefits.
SOCIALISM
• Socialism’s roots are found in the emergence of
industrialisation in Europe.
• Socialism believes that people are naturally
cooperative and place value upon community
well-being.
KEY FEATURES OF
SOCIALIST ECONOMIES
• Communal ownership of production
– The ownership of production and its means are placed
in the community’s hands.
• Centralised planning
– Production, distribution and pricing decisions are based
on the community’s needs.
– Crucial economic decisions are made by government.
CRITICISMS OF SOCIALISM
• Bureaucratic size
– Centralised decision-making requires a large amount of
information, and thus a large bureaucracy.
• Individual disincentives
– There is no extra reward for hard work (although some socialist
systems differ, so this criticism is not relevant to certain systems).
• Alienation
– Just as in capitalism, some forms of socialism alienate workers.
TODAY’S ECONOMIC CHALLENGES
• The decline of Western manufacturing
• Outsourcing jobs
• Western trade deficits
• Changing attitudes towards work
CHANGING ATTITUDES
TOWARDS WORK
• Ideas about the value of work and role in life are
changing.
• There are different expectations between Gen X,
Gen Y and Baby Boomers.
• Loyalty to an employer is no longer automatic.
• Productivity requires these issues to be addressed.

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CHAPTER 3

Mike Luckovich and Creators Syndicate. All rights reserved.

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